Financial Accounting-Paper: CC – 1.1 Ch-C.U.

-2019
Full Marks – 80
Group - A
Answer the following questions:
1. (a) Mention the names of accounting concept or convention being followed in the following instances:

(I) Unsold stock is valued at lower of cost or net realisable value.

(II) A business will continue its operation for an indefinite period and will not be dissolved in the near future.
(b) Using accounting equation, calculate total assets if-
Capital - ₹5,00,000, Creditors - ₹2,00, 000
Revenue during the period ₹5,00,000
Expenses during the period - ₹3,00,000.
(c) What do you mean by Revenue? 2+2+1=5Marks

Or,

From the following information, ascertain income for the year ended 31.03.2019 according to accrual basis of
accounting: 5 Marks

(a) Income received in cash for the year ended 2,00,000

(b) Accrued Income as on 31.03.2019 35,000

(c) Income received in advance during the year 20,000

(d) outstanding expenses as on 31.03.2019 40,000

(e) Prepaid expenses as on 31.03.2019 30,000

2. Rectify the following errors after preparation of Trial Balance but before preparing Final accounts by passing
necessary Journal entries:

(a) Goods taken by proprietor of ₹5,000 for gift to his son were not recorded at all.

(b) ₹5,000 received from Bablu against debts previously written oft as bad debts have been credited to his
personal account.
(c) A cheque received from Ashis, a debtor for ₹4,000 was directly received by the proprietor who deposited it
into his personal bank account. 1+2+2=5Marks

3. State the objectives of issuing Accounting

4 (a) Discuss the concept of capital maintenance.

Or

(a) What is fair value accounting?

5. A trader has credited certain items of sales on approval aggregating ₹10,000 to sales account Of there,
goods to the value of ₹3,000 have been returned and taken in stock at ₹1,500 though record of return was
committed in accounts, and in respect of another parcel of ₹1,000 (cost being ₹500), the period of approval
did not expire on the closing date.

Show adjustment and correcting entries in the books of the trader. 5Marks

Or,

The following details were extracted from the books of ABC Ltd. for the year ended 30.06.2019:

July 1, 2018

Sales Ledger Balance total 40,000

July 30, 2019

Sales 90,000

Return from Customers 8,000

Cheque received from Customer 80,000

Cheque Dishonoured 300

Bills accepted by Customers 2,700

Noting charges on dishonoured 10

Bad Debt written off 1,600

Interest on Customers overdue 100

account

Carriage charged to Customers 200

Cash discount allowed 1,800

Show the General Ledger Adjustment Account as it will appear in the Sales ledger. 5Marks

Group - B
6. ABC Ltd. purchased the following machines:

On 1st January, 2018 40,000

On 1st July,2018 20,000

On 1st October,2019 10,000

Depreciation was provided @10% p.a. under the diminishing balance method. The machine purchased on 1st
July, 2018 was sold on 31st March, 2019 at ₹15,000.

Show the Machinery accounts in the books of ABC Ltd. for the year 2018 and 2019 assuming that accounts are
closed on 31st December every year. 10Marks

Or,

On 31st December, 2018 Sunday Debtors and Provisions for Bad Debts stood at ₹90,000 and ₹6,750
respectively. During the year 2019 Bad Debts amounting to ₹4,560 were written off. On 30th June, 2019 an
amount of ₹580 was received on account of a debt written off as bad last year. The Debtors list on 31st
December, 2019 was verified and it was found that amongst Sundry Debtors amounting to ₹ 65,940, an
amount of ₹940 was to be written off as bad. It was decided to maintain the provision for bad debts at the
same percentage as it was on 31st December, 2018.
Prepare Bad Debts account and Provision for Bad Debts account. Also show how the relevant items would
appear in the Profit & Loss Account and Balance Sheet as on 31.12.2019. 3+3+2+2=10Marks

7. Subal keeps his books on single entry method. On 1st January, 2018 his assets and liabilities were as follows:

Capital ₹61,000, Sundry Debtors ₹20,000, Plant and Machinery ₹31,000, Furniture and Fittings ₹3,000, Stock
₹10,000 and Sundry Creditors ₹15,000.

The followings are the analysis of his Cash Book for the year 2018:

Receipts ₹ Payments ₹

Cash in hand 12,000 Payments to 20,000

Receipts from 15,000 Wages 5,000

Cash sales 20,000 Sundry Expenses 10,000

Drawings 5,000

Cash in hand 7,000

47,000 47,000

On 31st December, 2018 his assets and liabilities were as follows:

Sundry Debtors ₹25,000 Sundry Creditors ₹10,000, Plant and Machinery ₹31,000, Furniture and Fittings
₹3,000, Stock ₹22,000.

You are required to prepare a Trading and Profit & Loss Account for the year ended 31st December, 2018 after
providing.
(a) Depreciation on Plant and Machinery @ 5% p.a. and Furniture and Fittings @ 2% p.a.
(b) Provision for Bad and doubtful debts @ 5% on Sundry Debtors. 10Marks

Or,

The following is the Receipts and Payments Accounts of Calcutta Football Club for the year ended 31.12.2018:
 Receipts ₹ Payments ₹

Cash in hand 2,500 Remuneration to 6,000

Cash at Bank 22,300 Groundman’s salary 2,500

Bank Interest 500 Purchase of 15,500

Entrance fees 5,000 Bar room expenses 2,000

Subscriptions 25,000 Ground Rent 4,500

Bar room receipts 4,000 Night club expenses 4,800

Sales of equipment 800 Printing and 2,500

Proceeds of night club 10,800 Repair to equipment 4,500

Cash at Bank 25,600

Cash in hand 3,000

70,900 70,900

Additional Information:

01.01.2018 31.12.2018

₹ ₹

Subscription due 1,500 1,000

Outstanding exp. for printing & stationery 1,000 800

Equipment 8,000 17,500

You are required to prepare:

a) An Income and Expenditure Account for the year ended 31.12.2018.

(b) A Balance Sheet as on that date. 10Marks

Stock as on 01.01.2018 45,000

Stock as on 31.12.2018 60,000

Purchases less returns as per 31.12.2018 3,00,000

Sales less returns as per 31.12.2018 3,73,000

Purchases less returns from 01.01.2019 to 07.06.2019 1,25,000

Sales less return from 01.01.2019 to 07.06.2019 1,80,000

Poor selling goods worth ₹5,000 were written off while valuing closing stock as on 31.12.2018. The original
cost of goods was ₹8,000. A portion of this stock (original cost of which was ₹4,000) was sold during March
2019 at a loss of ₹1,000. The balance of this stock is worth the original cost Value of salvaged goods was
₹10,000. Gross profit remained at an uniform rate throughout.

You are required to ascertain the amount of loss of stock to be claimed from insurance company. 10Marks

9. Shri Das of Kolkata sent on Consignment 1,000 bottles of medicine costing ₹70 each to Shri Sen of Burdwan
and incurred ₹1,000 for carriage and ₹600 for insurance.

Account sales from Shri Sen revealed the following:

₹ ₹

Sales proceeds of 600 bottles 60,000

Less: Carriage to Godown 10,500

Rent of Godown 500

Insurance 500

Commission 3,000

14,500

45,500

It is also revealed that 100 bottles were destroyed in godown and Shri Sen collected ₹6,000 from Insurance
Company.
Prepare Consignment Account in the books of Shri Das. 10Marks

Group - C

10. The following is the Trial Balance of Mr. S. K. Sen as on 31st December, 2018 :

Debit Balance ₹ Credit Balance ₹

Drawings 5,800 Capital 60,000

Stock 28,000 Returns 3,200

Returns 4,200 Sales 2,10,000

Purchases 1,75,000 Sundry Creditors 25,500

Freight and Carriage 9,700 Bank loan @6 % p.a. 20,000

Rent & rates 3,600 Misc. Income 500

Salaries & wages 15,300 Discounts 1,600

Sundry Debtors 35,000

Interest on bank loan 1,000

Printing & 7,800

Cash at bank 6,000

Discounts 1,200

Furniture & Fittings 6,000

General expenses 8,000

Insurance 2,800

Cash in hand 2,000

Postage & Telegram 480

Travelling expenses 320

3,20,800 3,20,800

Additional Information:

(i) Included amongst the Debtors is₹ 4,000 due from R. Das and included among the Creditors ₹3,000 due to
him.
(ii) Provision for doubtful debts be created @ 10% and provision for discount @ 5% on debtors
(iii) Personal purchases amounting ₹2,000 had been included in the purchase day book.
(iv) Depreciate furniture & fittings and machinery @ 10% and 15% p.a. respectively.
(v) Interest on bank loan is outstanding for 2 months.
(vi) Stock on 31.12.2018 was ₹65,000

You are required to prepare a Trading and Profit and loss Account for the year ended on 31.12.18 and balance
Sheet on that date. 15Marks